Amazon Posts Second-Quarter Earnings Miss

Revenue grew strongly, but EPS fell slightly in the last quarter.

Some investors may find the company's earnings disappointing, but Amazon has always stressed that it considers the long-term outlook with its investments.
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Amazon plays the long game, but for now, its investors may find themselves discouraged. The online retail giant posted an earnings miss on Thursday. Though its second-quarter reported earnings of $15.7 billion came in roughly on par with analysts' estimates, its earnings-per-share loss of $0.02 did not. Wall Street had expected growth of $0.05, according to Yahoo! Finance.

Though the company came up short in some ways, the report still shows strong growth in revenue, which was up by 22 percent over the $12.8 billion earned in the second quarter 2012.

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Shares slipped by around 3 percent in after-hours trading following the announcement, but had recovered to a 1.6 percent fall by the time of this article's publication.

Though some investors may find the company's earnings disappointing, Amazon has always stressed that it always considers the long-term outlook with its investments.

"We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extent and solidify our current market leadership position," CEO Jeff Bezos famously wrote in a 1997 letter to investors.

The way to succeed as a retailer, he said, was to attain that market leadership, which could "translate directly into higher revenue."

The question is whether Amazon can be a leader in all of the areas it's entering. New endeavors abound at Amazon these days. The company has been testing a grocery delivery service in Seattle and Los Angeles, for example.

[OPINION: How Amazon Won]

Amazon has also been aggressively growing its video content, including an expanded deal with Viacom to make popular shows like SpongeBob SquarePants available for online streaming. The company has also greenlit pilots for five new original series, including "Alpha House," a political comedy starring John Goodman. The push into more video streaming puts the company in direct competition with Netflix, whose star-studded political drama "House of Cards" and reboot of sitcom "Arrested Development" have helped to boost its subscription numbers.

Amazon has stiff online video competition in Netflix and Hulu, and also could face a tough field in the relatively new area of grocery delivery: Google and Wal-Mart have also tested food delivery services. With that kind of competition, market leadership could be tough to come by. Then again, large retail competitors haven't stopped the company yet.

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